Top Apple Analyst Ming-Chi Kuo Says iPhone 18 Prices Will Defy Surging RAM Costs

Analyst Ming-Chi Kuo has played down fears that Apple will pass higher component costs on to consumers when it launches the iPhone 18 range, despite intensifying pressure from global memory shortages.

According to the veteran Apple watcher, rising DRAM prices are set to hit smartphone makers hard in 2026, but Apple is likely to absorb much of the impact in order to keep headline pricing stable.

The comments come amid growing concern that the AI server boom is distorting the semiconductor supply chain, pushing up prices for LPDDR and NAND memory used in smartphones.

Estimates suggest memory prices are already 10 to 25 percent higher than a year ago, with further increases expected later in 2026. For consumers, this has raised questions over whether the next iPhone generation could see a price hike.

Apple's Leverage In A Tightening Memory Market

In an X post, however, Kuo believes Apple's scale and negotiating power put it in a unique position. While higher memory costs will weigh on margins, he argues that Apple can secure a supply that rivals cannot, allowing it to hold the line on iPhone 18 pricing and potentially strengthening its competitive position at a time of industry-wide stress.

Kuo notes that Apple now negotiates iPhone memory pricing on a quarterly basis, rather than every six months, giving it more flexibility but also exposing it to market swings more quickly. He expects another round of price increases in the second quarter of 2026, on a scale similar to those seen in the first quarter.

'For most non-AI brands, even if you're willing to pay up, there's no guarantee you'll get the supply,' Kuo said. 'The fact that Apple can lock in a deal like this shows just how much leverage they have.'

This leverage is becoming increasingly important as chipmakers prioritise advanced memory for AI servers, where margins are higher, over components used in consumer electronics. LPDDR and NAND shortages are already being felt across the smartphone industry, fuelling speculation that device prices could rise across multiple brands over the next 12 to 18 months.

Apple, however, has a track record of using market disruption to its advantage. 'Higher memory costs will hit iPhone gross margins,' Kuo said. 'But Apple's playbook is clear: use the market chaos to their advantage—secure the chips, absorb the costs, and grab more market share. They'll make it back later on the services side.'

iPhone 18 Pricing Strategy Under Scrutiny

Investors are expected to look closely for any commentary on memory costs during Apple's 30 January earnings call, which will cover the first fiscal quarter of 2026. Kuo believes management will acknowledge cost pressures but avoid signalling any immediate price increases for consumers.

Apple's current plan, he says, is to avoid raising iPhone 18 prices 'as much as possible', with at least the starting prices of the new models remaining flat. That would mirror the approach taken with the iPhone 17 lineup, where the base model remained at $799 (£639.20), despite rising component costs.

There were some exceptions. Apple increased the price of the iPhone 17 Pro by $100 (£80.00) after making 256GB of storage the minimum configuration, effectively passing on higher memory costs to buyers at the premium end of the range. Still, the headline starting price remained unchanged, a strategy Kuo expects to continue with the iPhone 18 for marketing reasons.

That said, memory is not the only potential headache. Kuo has warned that other components could also face shortages as the AI server boom continues to squeeze the wider supply chain. If pressures intensify across multiple inputs, Apple may eventually have limited room to manoeuvre without adjusting prices.

For now, though, the analyst's message is clear: while DRAM and NAND price hikes are real and worsening, Apple's financial strength and supply chain clout mean consumers should not expect an immediate jump in iPhone 18 prices, even as the rest of the smartphone market grapples with rising costs.